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Economics of Gambling in Italy

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The primary regulator for betting, lotteries, bingo and gaming machines in Italy is the Amministrazione Autonoma dei Monopoli di Stato – AAMS (Independent State Monopolies Administration), a department of the Ministry of Economics and Finance. Casinos and local smaller lotteries and “tombola” bingo games with prizes not exceeding €51,645 are regulated by local governmental bodies.

Italy’s gaming and betting market grew strongly between 1995 and 2003. Turnover (before payment of prizes) rose from about €9 billion in 1995 to nearly €15 billion in 2003.

Among the main gambling operators in Italy are Lottomatica s.p.a., which holds an exclusive license for lotto games and traditional instant lotteries. It also operates gaming machines with prizes (AWPs) and participates in collaboration with other operators for “concorsi pronostici,” a family of betting games that includes pools and betting on sports and non-sports events. Sisal s.p.a. holds an exclusive license for Superenalotto, and also operates gaming machines with prizes (AWPs) and participates in collaboration with other operators for “concorsi pronostici.” The Snai Group possesses a non-exclusive license for “concorsi prognostici”, as well as for betting and AWPs. This group operates as a supplier of betting services to licensed agencies.

Number of Gambling Operators by Sector:

  • Lottery Market: Lottomatica and Sisal >>> 2
  • Horse racing and sport betting agencies, including Lottomatica and Sisal >>> Not available
  • Licensed Bingo operators >>> 334
  • Companies operating AWPs, including Lottomatica, Sisal and Snai >>> 10

Each of the licensees has a distribution network of tobacco shops, snack bars, newsagents etc., which have reached an agreement with one or more operators to distribute their product. The total distribution network consist of 45,000 collection points.

Distribution Network by Gambling Operator:

  • Operator/gambling sector >>> Approximate number of sales points
  • Lottomatica s.p.a. >>> 30,000
  • Sisal s.p.a. >>> 20,000
  • Snai Group >>> 900
  • Horse racing and sports betting >>> 1,600
  • Bingo >>> 304 halls
  • Gaming machines >>> AWP: 170,000 devices in 65,000 locations. Amusement machines without money pay-out: 240,000

The turnover (handle) of the total betting market in 2004 (excluding casinos) was €25.0 billion.

Gambling Turnover (excluding casinos) in Italy in 2004 (in € million):

  • Type of Gambling >>> Turnover
  • Lotto >>> 11,689
  • SuperEnalotto >>> 1,836
  • Instant Lotteries >>> 527
  • Traditional lotteries >>> 67
  • Total Lotteries Sector >>> 14,119
  • Sports “concorsi pronostici” (toto pool) >>> 443
  • Horse racing “concorsi pronostici” (Tris, Totip) >>> 620
  • Sports betting >>> 1,304
  • Horse racing betting >>> 2,284
  • Total Betting Sector >>> 4,651
  • Bingo (in halls) >>> 1,542
  • Gaming machines (including amusement machine without money pay out) >>> 4,726
  • Grand Total >>> 25,038

The overall winnings distributed to participants in gambling in 2004 were equal to €13.7 billion. The total gross gaming revenue (GGR) was, therefore, approximately €11.3 billion. The operation of gambling activities is not subject to VAT, with the exception of gaming machines without money prizes.

There was a very strong industry growth of 34.4% in 2004 over 2003, which was mostly due to increases in lotteries sales. In terms of market share, only two operators exceeded 10%:

– Lottomatica, with approximately 50%
– Sisal, with approximately 10-15%

It is expected however, that within the next five years, the market share of Lottomatica will fall below 40%, due to the growth of other gambling sectors, AWPs in particular. The market share of Sisal, on the other hand is expected to remain stable. In general the scratch cards market is expected to continue to grow, while the betting industry is expected to experience a slow-down.

Gambling Industry Market Share 2004:

Italy1

Source: Centre for the Study of gambling, Salford, own analysis.

There were large changes made in the gambling taxation system in Italy in 2005. There was a reduction of betting taxation, increase in taxes on lotto, and the elimination of mandatory payments by “concorsi pronostici” to the Italian National Olympic Committee.

In the case of Lotto and traditional lotteries, given that the state treasury serves as a bank, the tax yield can vary significantly each year, depending on the games’ performance. On the other hand, Superenalotto, betting and instant lotteries tax varies only slightly from year to year. Certain games also allocate mandatory funding to specific entities (i.e. the Region of Sicily).

Gambling Taxation in Italy in 2004:

  • Games >>> Tax yield as % of turnover >>> Tax yield as % of pay out
  • Lotto* >>> 42.08
  • Superenalotto >>> 53.17
  • Tris >>> 9 >>> 21.8
  • Totip >>> 28.63 >>> 10.3
  • Concorsi Pronostici** >>> 33.84
  • Traditional lotteries >>> 35.58
  • Instant lotteries >>> 37.58
  • Horse racing betting(totalisator) >>> 4.51 >>> 12.6
  • Non-horse racing betting >>> 10
  • Non-horse racing totalisator betting >>> 20
  • Bingo >>> 20
  • Machines without money prize*** >>> 8
  • Machines with money prize >>> 13.50

* Figure for 2005

** In 2005 the tax on winning was raised from 3% to 6%

*** This category is also liable to VAT

Gambling Tax Contribution by Sector 2004:

  • Type of Gambling >>> Tax (€ millions)
  • Lotto, SuperEnalotto and “concorsi pronostici” >>> 6,091
  • Traditional lotteries and Instant Lotteries >>> 222
  • Horse racing and sports betting >>> 167
  • Bingo (in halls) >>> 308
  • Gaming machines (including amusement machines without money pay out) >>> 722
  • Total >>> 7,510

Gambling Tax Contribution in % by Sector 2004:

Italy2

Source: Centre for the Study of gambling, Salford, own analysis.

After receiving the gambling taxes, the Italian government then distributes funds to the variety of good causes. One of the main beneficiaries is the Italian National Olympic Committee (CONI), which receive approximately €450 million annually. The National Union for the Betterment of Horse Breeds (UNIRE) has received more than €1.2 billion since the year 2000 to the present time, where funding was mostly made available through betting on horse racing. Using the proceeds of Lotto, the Ministry of Economic Affairs and Finance supports a fund for the recovery and preservation of cultural, archaeological, historical and artistic resources with approximately €150 million per year. In addition, concorsi pronostici allocate 2.45% of its revenues to the Sports Credit Bank and minor lotteries contribute 13.5% to the charitable organisations that organise them.

Sisal, Snai and Lottomatica jointly employ approximately 2,000 people. The smaller companies together with indirect employment (hardware, food services, logistics etc.) employ roughly 10,000 people. If employees of the collection points (snack bars, tobacco shops etc.) are to be included in the number of indirect employment induced by gambling, then an estimated total of 150,000 people work in the sector with 50,000 commercial enterprises drawing some of their income from gaming. (Note that gambling is often only a small part of all of their activities.)

According to the EURISPES 1999 statistics, 58.8% of Italians (about 30 million) participate in gambling. Survey results indicated that 32.6% of the participants do it for profit and 22.2% for enjoyment and fun. It was estimated that each Italian spent about 600.000 It.£ (about €300) in public games for which the State received It. £11,329 billion (about €5.6 billion) in 1999. There is a small amount of institutions in Italy that deal with gambling addiction. Societa Italiana di Intervento sulle Patologie Compulsive is an organization in Italy that actively promotes minimisation of harm from problem gambling.

© European Union

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